1 What is the current state of the shipping industry in your country?

The UK is one of the leading maritime centres in the world. Its shipping industry contributes approximately £7.7 billion to the UK GDP and directly supports about 240,000 jobs.

The UK maritime industry facilitates 95 per cent of all UK trade and is larger than both the automotive and aerospace transport industries. It extends beyond the pure shipping sector to include ports, marine equipment and business services (eg, brokers, financiers, insurers, lawyers and consultants). In all, the UK maritime industry contributes about £57 billion to the UK’s economy and supports around a million workers.

The UK ports industry is the second largest in Europe, handling almost 500 million tonnes of freight each year, as well as over 65 million international and domestic passenger journeys. There are about 120 commercial ports in the UK, including major all-purpose ports, ferry ports, specialised container ports and ports catering to specialised bulk traffic, such as coal or oil. There are also a large number of smaller ports catering for local traffic or specialising in particular sectors, such as fishing and leisure boating. The UK ports industry handles over 95 per cent of UK import and export, including 25 per cent of the UK’s energy supply and almost half of the country’s food supplies by volume, and directly employs about 118,000 people.

The UK marine industry’s key market sectors include leisure, military, commercial and offshore renewable energy. Marine systems and equipment form an important element of the UK’s exports.

While the military equipment sector is important, the global merchant shipping industry provides a massive market for commercial systems and equipment. The UK also has a thriving superyacht industry, with a turnover of around £700 million a year and over 4,500 employees. The superyacht industry has more than doubled in the past 10 years. Many leading international yacht designers are based in the UK. The leisure marine sector mixes service and manufacturing, from surveyors and charterers to specialist equipment manufacturers.

The UK leads the world in respect of marine insurance, writing about a third of global marine insurance premiums and 60 per cent of professional and indemnity insurance. Twenty-six per cent of global shipbroking is undertaken in the UK.

The UK government is committed to the training of seafarers. The UK’s maritime education and training infrastructure are important in producing the next generation of maritime professionals. It is estimated that just over 21,970 UK seafarers were active at sea during 2021, with around half working as officers.

The UK is home to leading maritime regulatory bodies, such as the International Maritime Organization (IMO) and the International Association of Classification Societies (IACS).

The Baltic Exchange, an independent source of maritime market information for the trading and settlement of physical and derivative contracts, is also based here. Other influential maritime business service provider bodies are also located in the UK: the UK Chamber of Shipping, Maritime London, UK Major Ports Group, British Ports Association, British Marine, the Society of Maritime Industries, the Admiralty Solicitors Group and the Shipbuilders and Shiprepairers Association. These all help to support and promote the UK marine industry.

London is a leading centre for maritime financing. It also provides leading arbitration and mediation services to the global industry, from the London Maritime Arbitrators Association, the London Court of International Arbitration and the International Dispute Resolution Centre. During the covid-19 crisis, English courts and arbitral tribunals have been quick to successfully adapt to remote hearings.

The figures stated above are taken from the UK government’s own statistics and a Centre for Economics and Business Research (CEBR) report commissioned by Maritime UK, published in April 2022 (which is the most up-to-date report available). Maritime UK is an association of shipping, ports and maritime business services sectors in the UK. These figures in the CEBR report were provided prior to the outbreak of covid-19 and, while the pandemic will inevitably have a significant short- to medium-term effect on the UK shipping industry, how it will shape the industry in the long term remains to be seen.

2 What are the prevailing shipping market trends affecting your country? What has been the impact of the covid-19 pandemic?

Since the WHO declared covid-19 a pandemic in March 2020, the world has seen a huge amount of upheaval. Yet, despite much happening during the past two years, the long-term challenges and opportunities for the sector remain very similar.

While the pandemic led to an initial lull in activity, this was followed by a boom in demand. It drove demand for shipping imports to levels that UK ports are not equipped to handle, causing a massive backup. A particular issue that UK ports (like ports in other countries) are also experiencing is the lack of available haulage. This has meant that some freight is not being collected as rapidly as they would normally be from port terminals of all types, not just container ports. This has resulted in some further delays for a range of ports, and terminal operations are working with their customers to get these goods out of their ports to avoid further congestion. It has been reported that Felixstowe, Britain’s biggest container port, was so congested that it was considering turning ships away. Some ports and terminals report that the peak has passed, while others are still experiencing significant congestion.

The offshore sector has also been affected by the pandemic. Many offshore oil and gas companies had ceased extraction activity, meaning that some port cargo and support activities were falling substantially. However, it has been reported that the offshore industry is now returning to pre-pandemic activity levels.

Renewable energy is also important for the country and ports; however, the pandemic exerted an unprecedented shock across the entire energy sector, impeding the progress of energy transition. Albeit the challenges facing the energy transition, the pandemic also opens the door to opportunities. Now is a critical window for energy transition and sustainable development, especially as the public is calling for a green stimulus plan.

The impact of covid-19 aside, global shipping has experienced difficult challenges since the 2008 financial crash. A slump in the shipping market, with deflated oil and commodity prices, together with overcapacity in some sectors, has affected shipping worldwide, not just the UK. The container market is the most notable exception, with record demand and freight rates being experienced since the crippling effect of covid-19 eased.

The effects have been seen in the reduced amount of ship finance transactions and the amount of finance available to the shipping market, as well as in the amount of business being placed in the London insurance market. That said, UK lawyers, courts, arbitrators and mediators have been involved in a large number of disputes that have arisen as a result of adverse market conditions, either because UK-based parties are involved or because the relevant contracts are governed by English law or the parties have submitted to the jurisdiction of the English courts or arbitration in London, as the common jurisdiction of choice for companies in the shipping sector. Indeed, it has been reported that the dispute resolution sector has been busier than ever in the past year.

More recently, political developments in Ukraine have led to a need for advice regarding the implications for ship and cargo owners and charterers.

3 Are there any recent domestic or international political or legislative developments that may have an impact on your country’s shipping market?

As part of its strategy to cut greenhouse gas emissions in shipping, the IMO has adopted amendments to MARPOL. These amendments can be found in Annex VI and will require all existing ships (that are over 400 GT and fall within Annex VI) to calculate their ‘Energy Efficiency Design Index’ (EEXI) to establish their annual operational carbon intensity indicator (CII) and CII rating. Ships will then get a rating of their energy efficiency (A, B, C, D, E – with A being the best rating) and the aim will be to improve the energy efficiency of the vessel’s design.

The IMO states:

Administrations, port authorities and other stakeholders . . . are encouraged to provide incentives to ships rated as A or B also sending out a strong signal to the market and financial sector. Further, a ship rated D for three consecutive years, or E, is required to submit a corrective action plan, to show how the required index (C or above) would be achieved.

The requirements for EEXI and CII certification will come into force on 1 January 2023. It is expected that most existing ships will not meet the EEXI targets and that significant modifications will be required to ensure ships are compliant by 1 January 2023.

Brexit has been a key political development of recent years for the UK shipping market. The UK officially left the European Union on 31 January 2020, following the ratification by the UK and the EU of the EU-UK Withdrawal Agreement. Under the terms of the EU-UK Withdrawal Agreement, the UK entered into a transition period during which EU law continued to apply to the UK. The transition period ended on 31 December 2020. The European Union (Withdrawal) Act 2018 created a new body of UK law, known as retained EU law, providing a new constitutional framework for the continuity of ‘retained EU law’ that applied to the UK at the end of the transition period. Thousands of amendments to that retained EU law also entered into force at the same time. This has seen the continuation in the UK of much of the body of rules and regulations from the EU legal framework.

For example, the Merchant Shipping (Recognised Organisations) (Amendment) (EU Exit) Regulations 2019 have been enacted to allow for EU Regulation (EC) 391/2009 on common rules and standards for ship inspection and survey organisations to continue to operate as retained EU law in the UK.

The UK’s withdrawal from the EU has also had an effect on sanctions. The UK’s sanctions regime has been derived from that of the EU but, as of 1 January 2021, the EU sanctions regime is no longer applicable to the UK. The UK now has its own autonomous sanctions and export control regime, which is principally regulated by the Sanctions and Anti-Monetary Laundering Act 2018 (the Sanctions Act). These UK sanctions apply to the conduct of all UK persons, wherever they are in the world, including branches of UK companies based overseas.

The UK’s current sanctions broadly mirror the existing EU sanctions but there are some key differences, with the UK sanctions being more detailed than their EU counterparts in some areas. For example, there are more comprehensive prohibitions that apply to Russia and Syria in relation to energy-related products and crude oil and petroleum-related products respectively. There are also more comprehensive sanctions that apply to Russia following Russia’s invasion of Ukraine, which fall under the Russia (Sanctions) (EU Exit) Regulations 2019 and its subsequent amendments.

It is expected that the sanctions regimes between the EU and the UK will likely diverge over time.

Bearing in mind that the EU is the UK’s largest trading partner and that, post-Brexit, the UK would no longer benefit from EU internal trade access without a bilateral agreement between the UK and the EU or the network of EU bilateral and multilateral external trade agreements with other countries. Freight statistics from the UK Department for Transport highlight the impact Brexit has had on British ports. They state that ‘compared to January-March 2020, the total freight tonnage decreased by 9 per cent, while traffic fell by 13 per cent – with inward units hit the hardest with a 17 per cent fall.’ Despite this statistic, they state that ‘things for ports have changed, but not in the dramatic way it was predicted, as the large majority of UK ports are used to dealing with goods coming and going from all over the world.’

In the long term, Brexit is not expected to have a dramatic effect on total UK maritime volume, particularly as new trade agreements between the UK and other EU and non-EU countries are concluded.

London’s prominence as a major insurance, legal, broking and general shipping services hub means that many businesses that are currently based in the UK, or that do significant business with the UK, will not move or take their business elsewhere.

Indeed, some businesses that currently operate abroad may choose to move to the UK once EU laws cease to be applicable.

Irrespective of the outcome of the UK’s trade discussions with both EU and non-EU countries, English law is likely to continue to be chosen to govern international contracts and transactions. English court jurisdiction and arbitration in London are also likely to remain the preferred choices for dispute resolution among international contracting parties: there are more arbitration proceedings seated in London each year than in Singapore, Paris, Stockholm, Geneva, Dubai and Hong Kong combined. This is supported by a recent survey that concluded that, in the wake of Brexit and covid-19, maritime arbitration in London continues to thrive. The London Maritime Arbitrators Association continues to report high numbers of LMAA arbitrator appointments, with 2,777 arbitrator appointments in 2021.

The Department of Transport has recently developed a long-term strategy, Maritime 2050 – Navigating the Future, which aims to ensure that the UK remains one of the world’s leading maritime nations.

4 What are the key regulatory and compliance issues for your country’s shipping market? What’s coming up in the near future?

The UK is subject to a wide range of regulatory legislation under domestic, regional (to the extent that EU legislation, as it applied to the United Kingdom on 31 December 2020, is now retained EU legislation) and international law.

Sulphur cap

This subject includes resolutions and conventions sponsored by various UN agencies, such as the International Maritime Organization (IMO) and the International Labour Organization (ILO).

In recent years, the IMO has been particularly active on environmental regulation, reflecting the global initiative to reduce ship emissions and pollution of the marine environment. From an international point of view, the IMO periodically proposes and adopts amendments to revise the key convention in this area – the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78). The revised Annex VI to MARPOL (and the associated NOx Technical Code 2008) came into force on 1 July 2010 and imposed more stringent limits on sulphur content in fuel. In particular, the revisions provided for a reduction in the sulphur content of any fuel oil used on board ships outside the ECAs (the global sulphur cap) to 3.5 per cent (from the previous 4.5 per cent) from 1 January 2012, followed by a further reduction to 0.5 per cent from 1 January 2020. A further amendment adopted by the IMO entered into force on 1 March 2020 and prohibits the carriage of non-compliant fuel oil for combustion purposes for propulsion or operation on board a ship (unless it is fitted with a scrubber).

To bring sulphur limits within the EU in line with IMO-imposed levels, Directive (EU) 2016/802 came into force on 10 June 2016. The Directive was implemented into the UK’s domestic law by the Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008. Following the UK’s withdrawal from the EU, the UK enacted the Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2019 to retain the existing requirements under the Directive.

However, the ongoing disruption caused by the covid-19 pandemic has impacted on efforts to ensure compliance with the sulphur limits. For example, the UK’s Maritime and Coastguard Agency (MCA) suspended routine port state control inspections in March 2020, with the focus shifting to containing the spread of the pandemic.

Cyber-risk and cyber-risk management

Bearing in mind the number of attacks over recent years on major shipping companies, maritime cyber-risk and cyber-risk management are clearly an important concern for the shipping industry. The IMO has issued guidelines on maritime cyber-risk management that provide high-level recommendations and has also adopted Resolution MSC.428(98), Maritime Cyber Risk Management in Safety Management Systems, which encourages administrations to ensure that cyber-risks are appropriately addressed in existing safety management systems, no later than the first annual verification of the company’s Document of Compliance after 1 January 2021.

Ship recycling

International standards on ship recycling are addressed in the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 2009 (the HKC). Although the HKC is not yet in force, the EU incorporated elements of the HKC regime into EU law through Regulation (EU) No. 1257/2013 (the 2013 Regulation) on 30 December 2013. The regulation remains applicable to the UK since 1 January 2021, following the end of the transitional period for the UK’s withdrawal from the EU, by the Ship Recycling (Facilities and Requirements for Hazardous Materials on Ships) (Amendment) (EU Exit) Regulations 2019 (the UK Ship Recycling Regulation).

As of 1 January 2021, UK ships over 500 gross tonnage can only be recycled at approved facilities set out in a list set out by the UK. The MCA has now provided a list of 44 approved ship recycling facilities, including those on the EU list and some additional ones. It is expected that the lists between the EU and the UK will diverge further over time.

Seafarers

Following the P&O Ferries’ firing of 786 seafarers in March 2022, said to be with the aim of guaranteeing the company’s future viability, it was announced in the Queen’s Speech (where the government outlines its priorities for the next legislative session of parliament) that new laws will be implemented to protect seafarers. It was announced that: (1) the new laws will mean that all UK ferry operators will be compliant with the National Minimum Wage; (2) the MCA will review their enforcement policies; (3) the government will take actions to prevent employers who have not made reasonable efforts to reach agreement through consultations from using ‘fire and rehire tactics’; (4) a new statutory code will allow a court or employment tribunal to take the manner of dismissal into account if an employer fails to comply with the code and to impose a 25 per cent uplift to a workers’ compensation; (5) there will be renewed focus on the training and welfare elements of the UK flagship maritime strategy; (6) UK reforms to Tonnage Tax will come into effect, making it easier for a maritime business to set up in the UK; (7) the UK’s international partners will be engaged to discuss how maritime workers on direct routes between countries should receive a minimum wage; and (8) there is an intention to give British ports new statutory powers to refuse access to regular ferry services that do not pay their crew the National Minimum Wage.

Financial sanctions

On 27 July 2020, the UK Office of Financial Sanctions Implementation (OFSI) issued its Maritime Guidance, providing ‘financial sanctions guidance for entities and individuals operating within the maritime shipping sector’. The Maritime Guidance identifies a number of illicit and suspicious shipping practices, including ship-to-ship transfers used to facilitate the illicit transfer of coal, crude oil and petroleum products to evade sanctions, disabling or manipulating the automatic identification system on vessels, and other topics. The guidance further describes best practices for reducing sanctions risk exposure. The OFSI does not recommend any specific measures to mitigate deceptive shipping practices, only advising that each company should ‘assess its own risks and put due diligence measures in place to manage these risks’.

Following the Russian invasion of Ukraine, the UK government brought forward the Economic Crime (Transparency and Enforcement) Act 2022, which included important changes to the OFSI’s powers. These measures commenced on 15 June 2022. For breaches of financial sanctions committed after 15 June 2022, the OFSI can impose civil monetary penalties on a strict civil liability basis. This means that the previous requirement for the OFSI to prove that a person had knowledge or reasonable cause to suspect that they were in breach of financial sanctions will be removed, but will still bear the burden of proof to establish that there was a breach of financial sanctions prohibitions. This brings this aspect of UK financial sanctions legislation more in line with the legal test used for the import and export of arms, and the model used for US financial sanctions. There is no equivalent change to the financial sanctions criminal legal test or threshold.

5 What are the shipping industry’s current sources of finance? How do you predict they will develop, and what are the advantages and challenges to financing a vessel in your country?

In the years since the 2008 financial crisis, ship financing has changed considerably, with long-standing conventional financiers reducing their exposure or withdrawing from the market altogether, and new alternative sources of finance emerging. According to the Petrofin Global Index, global ship lending by the top 40 shipping banks has fallen by almost 35 per cent since 2011.

For more than a century, traditional ship finance has been based on financiers (banks largely in Europe and the US) taking a first priority mortgage on the ship. This proved to be a good way of lending to the sector, providing security in case the shipowner could not repay. As successive financial crises struck, the banks that historically dominated the shipping market (particularly the European banks) began to withdraw from shipping, either closing their books to new business or, in some cases, running down their portfolios and exiting the industry altogether (eg, The Royal Bank of Scotland and Commerzbank). The Scandinavian bond market closed its doors, and the speculative short-term investors consisting of hedge funds and venture capitalist trusts found immediate losses to be at odds with their short-term investment strategies, and so they too began to extricate themselves from the industry. Although this has been triggered by the financial crisis, other factors include the increasing regulation and scrutiny faced by European banks, particularly as a result of the Basel Regulations and following the significant losses incurred by those banks in recent years as a result of financing the shipping industry.

As Western banks have struggled to meet capital ratio criteria and other banking regulatory requirements, some have been altering their departmental structures. For example, the likes of DNB, ABN Amro and BNP have incorporated their independent shipping departments into a larger internal corporate structure.

The continuing retreat of the Western banks has provided an opportunity for East Asian players, particularly the Chinese banks, with an abundance of capital, to step in and build new shipping portfolios or expand existing ones. Although there has been a small decline over the past few years, the Far East still remains the new ship finance protagonist. At the time of the financial crisis in 2008, the top 15 global shipping lenders did not include a single East Asian bank. In 2018, the Export-Import Bank of China led the market, with the Bank of China and Sumitomo Mitsui Trust Bank Ltd occupying places in the top five. In 2020, Export-Import Bank of China dropped to second place, with BNP Paribas leading the market, but the aforementioned East Asian banks still occupy places in the top five.

Going into 2022, shipping finds itself in a strange position. For the first time since the global financial crisis, the industry looks to be an attractive one to lend to. Owners are likely to use the income generated in 2021 to pay down debt and look to become debt-free. There is also likely to be a shift away from S&P-related loan transactions to newbuilding ones, but the higher newbuild prices may pose some difficulties for lenders and owners.

Environmental issues continue to play an important role in ship finance. This is due, among other things, to increased environmental regulation (notably climate change legislation), emerging green technologies and enhanced corporate commitments from lenders to reduce environmental impacts, such as carbon footprints. As a result, lenders are becoming more committed to addressing environmental issues and increasingly selective as to whom and for what purpose they lend money.

The UK remains well placed in its continued service of the shipping industry, with a wealth of experience and advisers with established international offices headquartered in London. English law is particularly well-suited to ship finance, being one of the oldest and most stable of legal systems: it is predictable, being based upon precedent, much of which is rooted in the country’s maritime tradition and supported by specialist law firms that have grown with the industry. While traditional Western shipping banks are withdrawing from the sector, in light of the international nature of the service providers who have supported this industry, London still remains a core hub for managing transactions, even though the source of the finance may originate from more easterly shores.

6 Have there been any recent significant domestic or foreign court decisions or arbitration awards that impact on your country’s shipping market?

Parties to international shipping contracts commonly choose English law to govern their contracts because it is predictable and commercial.

Similarly, they often choose to have their disputes resolved in the English courts because English courts and judges have a reputation for offering quality and experience. As a result, many significant shipping decisions are heard in the English courts, and the past year has been no exception.

London also continues to be the most popular international arbitration centre in the world. While, in the UK, arbitration awards are confidential to the parties, any English arbitration award that goes to appeal will be heard by the English courts, and that judgment will be made public. There is, therefore, a sizeable body of English shipping case law to guide the market in its day-to-day commercial and contractual activities.

It is not possible to do justice to all the significant case law that has been generated by the English courts recently, but it is worth highlighting the following:

  • In K Line Pte Limited v Priminds Shipping (HK) Co Limited (the ‘Eternal Bliss’) [2021] EWCA Civ 1712, the High Court held that a shipowner can recover damages in addition to demurrage and that, provided the shipowner has suffered a different type of loss, it does not need to prove an additional breach of contract as a precondition to recovery. The Court of Appeal has, however, overturned the decision of the High Court. The Court of Appeal ruled that if a shipowner wishes to recover for damages in addition to demurrage arising from delay, then it is necessary to establish a breach of a separate obligation other than failing to load or unload within the permitted laytime under the charterparty.
  • An important decision in 2021 was that of the Supreme Court in Evergreen Marine (UK) Limited v Nautical Challenge Limited, the first decision on collision liability by the country’s highest court since the House of Lords gave judgment in The Savina [1976], over 40 years previously. Following a collision between two vessels off Jebel Ali, the Court of Appeal upheld the first instance judgment of Mr Justice Teare, to the effect that, in circumstances where one vessel is transiting a narrow channel and another vessel is waiting at the entrance of that channel to enter it, it is the narrow channel rule and not the crossing rule that applies. The Supreme Court granted permission to appeal against the Court of Appeal’s decision on the liability issue, namely the relationship between the narrow channel rule and the crossing rules and has subsequently allowed the appeal. The Supreme Court emphasised that the crossing rules were not to be lightly disapplied and that there was no requirement for either the stand on vessel or the give way vessel to be on a steady course before the crossing rules applied, provided that they were moving relative to each other in a manner that objectively gave rise to a risk of collision. As a result, the Supreme Court said that it was necessary for the first instance judge to redetermine all matter of apportionment. The judge revised the apportionment and decided that the Ever Smart should bear 70 per cent of the damage caused by the collision and that the Alexandra I should bear 30 per cent.
  • In Herculito Maritime Limited & others v Gunvor International BV & others (‘The Polar’) [2021] EWCA Civ 1828, the Court of Appeal held that the charterparty terms incorporated into the bills of lading did not exclude liability on the part of the bill of lading holders for payment of cargo’s contribution in general average when the shipowner had paid a ransom to pirates who had seized a cargo vessel in the Gulf of Aden, a peril insured under a policy of insurance.
  • In Splitt Chartering APS v Saga Shipholding Norway AS (the ‘Stema Barge II’) [2021] EWCA CIV 1880, the Court of Appeal overturned a decision of the Admiralty Court at first instance that considered the meaning of ‘operator’ for the purposes of the Convention of Limitation of Liability for Maritime Claims 1976 (the Limitation Convention 1976). In doing so, the Court of Appeal clarified that the term ‘operator’ requires a higher level of involvement than mere physical operation, involving an element of management or control.
  • In Holyhead Marina Ltd v Farrer & ors [2021] EWCA Civ 1585, the Court of Appeal upheld the Admiralty Court’s decision to define a marina as a ‘dock’ for the purposes of limitation under section 191 of the Merchant Shipping Act 1995.
  • In ‘CMA CGM Libra’, Alize 1954 v Allianz Elementar Versicherungs AG [2021] UKSC 51, the Supreme Court upheld the decisions of both the Admiralty Court and the Court of Appeal in determining that a defective passage plan may render a vessel unseaworthy.

7 What is the outlook for your country’s shipping market? Which sectors are likely to grow, and which not?

The UK government is highly committed to maintaining the UK as a leading maritime centre and promoting its growth. In recognition of the UK maritime industry’s significant contribution both to the UK economy and to the global shipping market, the UK Department of Transport has published a series of maritime reports and studies over recent years.

The most recent, and arguably prominent, is the Maritime 2050 strategy report, launched in January 2019 by the UK government in close partnership with Maritime UK, a body representing the UK maritime sector. This long-term strategy details the UK’s long-term ambitions for developing its core strengths across seven sectors in the maritime industry, as follows:

  • UK competitive advantage: maximise the UK’s strength in maritime professional services, maritime law, finance, insurance, management and brokering and develop new services such as green finance;
  • environment: lead the way in taking action on clean maritime growth enjoying economic benefits from being an early adopter or fast mover;
  • people: grow the UK’s maritime workforce and transform its diversity, reinforcing the UK’s reputation as the world leader in the provision of maritime education and training;
  • trade: promote a liberalised trading regime that delivers maximum benefit for its maritime sector;
  • infrastructure: support the continued multi-billion pound commercial investment in maritime infrastructure that makes the UK a globally attractive destination for all maritime business;
  • security and resilience: continue to be recognised as the global leader in maritime safety and security standards and expertise worldwide; and
  • technology: strengthen the UK’s reputation for maritime innovation, maximising benefits to the UK from new maritime technology through its world leading universities, maritime small and medium-sized enterprises and global companies.

While the UK seeks to embrace emerging technologies, such technologies have been a contributory factor in the decline in the number of the UK workforce out at sea. In addition to the wider historical trend of larger ships having fewer crew, the impact of modest wages being suppressed by an international labour supply has resulted in a shortage of British seafarers. While the UK has introduced initiatives in an attempt to boost the numbers undergoing training, the latest figures continue to pale in comparison to historical levels. With the growing demand for digital talent, it is likely that such technological advances will change the nature of seafaring as the workforce will become shore-based, rather than being at sea.

In June 2021, Maritime UK published a new report assessing progress by government and industry in delivering the recommendations set out within the Maritime 2050 report. Maritime UK chair Sarah Kenny said she was pleased, in spite of the global upheavals, ‘that the sector was able to keep its eye on Maritime 2050 and make real progress in delivering its recommendations. Such is the value that the sector attaches to the first long-term national government strategy for the maritime industries.’

At the time of writing, the fourth annual Maritime Exchange conference is scheduled to take place in late June 2022, and will discuss the progress over the past 12 months. It will also provide an opportunity to explore the government’s Maritime Sector Recovery Plan, expected to be published in the run-up to the Maritime 2050 conference. The plan is understood to detail actions to help the sector recover from the pandemic.

The Inside Track

What are the particular skills that clients are looking for in an effective shipping lawyer?

An effective shipping lawyer needs to combine solid knowledge of the law with a grasp of technical issues and sound commercial judgement. Commercial acumen is particularly important in the challenging market conditions that we have witnessed in recent years, because a value judgement often has to be made as to whether a case is worth pursuing. A shipping lawyer must be fully aware of global market and other relevant developments.

What are the key considerations for clients and their lawyers when arranging finance for a shipping transaction?

One key consideration for the borrower and the lender is flexibility, but their respective approaches will likely be opposing. The parties and their advisers must strike a balance between robust protection for a lender and freedom to operate in a commercially viable manner for the borrower. This requires industry experts, familiar with the nature of the assets and the industry, and a spirit of cooperative, relationship-driven transaction management.

What are the most interesting and challenging cases you have dealt with in the past year?

The grounding of the Ever Given in the Suez Canal has been one of the most interesting cases that I have handled during the past year. More recently, the political developments in Ukraine have resulted in numerous requests for advice on sanctions and the effect on existing charter commitments.